by Marshall Cobb - Head of New Projects
There has been some press this week about a large Sydney developer/builder experiencing financial pressure, which has led to unpaid and unhappy subcontractors and other creditors. Unfortunately as the property market cools, we are likely see more instances of failure.
The knock-on effect of any collapse is not only isolated to subcontractors, it will have an enormous impact on the purchasers of their properties. There will be no-one to fix or co-ordinate minor defects (2 year liability period), or major defects (6 year liability). Any financial impact will become the responsibility of the owner, whether directly or through the strata manager.
If a development is partly finished it can take quite some time for another builder to be appointed, and in some cases one may never be appointed. This can leave buyers with their deposits tied up in trust accounts until the contract sunset date (up to 3 years), and the lost opportunity cost of not being able to use those funds to buy another property in the meantime.
From a property buyers point of view it is critical to research the developer, and the builder before you buy.
Our developer/builders are all experienced with long track records of success, and to assist you with your own due diligence, we provide comprehensive details about their previous work on each projects website.
PS. For more information on resolving building disputes click here.